Is It Really That Hard To Change Banks? Here’s My Experience

Where Should We Put Our Money?

After moving across the country with little more than a Honda Civic and a pet rabbit, my husband and I got to setting up new utilities, writing security deposit checks, and updating everything with our new address. One thing we were relieved that we didn’t have to update? Our banking information.

But several years later, we discovered our home branch of Wells Fargo was being purchased by Flagstar—a regional bank in our old home state. That meant, even though we were living and working in California for many years, our checking account had still been under the charge of a branch in Indiana. When I researched the new bank, I found no local branches or ATMs we could easily access.

“I examined my situation: I had to change banks, and worse yet, I had to change banks quickly.”

While a more organized person would have acted promptly, I ran down the clock until one day, our money just automatically transferred. (Hey, it happens.)

The chaos that ensued is exactly why being proactive is essential—checks bounced, subscriptions expired, and bills went unpaid. In addition to having no physical connection with this new bank, I also found their online interface clunky and their customer service response times inadequate. Frustrated, I examined my situation: I had to change banks, and worse yet, I had to change banks quickly.

I ultimately chose to return to Wells Fargo since I was in a time crunch (and there was a mini-branch in my go-to grocery store), although the previous practices of the bank itself have conflicted with my values. Someday soon I intend to find a credit union or other online banking solution that I can take my time researching, speaking with financial experts, and transferring my payments thoughtfully.

Now that I’ve been through this banking back-and-forth, here’s what I learned that will help me change banks (on my own terms) in the future! I hope it helps you, too.

Finding A New Bank

My decision was based on an immediate need—I didn’t have a lot of time to truly research another financial institution to my liking. But it is important to look at what you like and what you don’t like about your bank. As I said before, customer service (both online and in-person), user interface, and an existing relationship all were important to me.

“I want a bank that is transparent about where my money is invested, has diversity on their boards and executive teams, and exhibits positive treatment of clients and employees.”

In the future I want a bank that meets all of the above, plus a few less tangible things. I want a bank that is transparent about where my money is invested (sustainability initiatives being a big plus!), has diversity on their boards and executive teams, and exhibits positive treatment of clients and employees. And, when it comes down to it, selecting banks with FDIC insurance, a fee structure that fits my spending, and great interest rates are all essential.

You might look for a personalized experience by going with a local credit union or community bank, or you may want to handle your banking entirely online. Perhaps you want to explore Environmental, Social, and Governance (ESG) investing and want your new bank to offer access to it. Some banks and financial institutions are even certified B Corps!

Just be clear before you start the transfer process on what you really want from your new bank, and don’t hesitate to ask their customer service if your expectations are reasonable. (Reading reviews from independent customers helps, too.)

Transferring Assets, Withdrawals, And Deposits

Once I realized Flagstar was not the right fit for me and decided to return to my previous bank, I had to re-open a checking account in California. This was mostly easy, just a little time-consuming as my husband and I waited for our banker to process the paperwork. Things I had ready were our social security numbers, photo IDs, and routing numbers so we could make an initial deposit.

However, this is where the simplicity stopped.

I went through a few months of automatic deposits and withdrawals to evaluate my recurring ones and updated the account information on all of them. A few urgent ones I went with first included:

Paycheck direct deposits
Rent or mortgage
Vehicle payments
Utilities
Subscriptions
Insurance
Loan and debt payments
Paypal, Venmo, or cash transfer services

Learn from my mistake though—I overlooked yearly expenses like renter’s insurance, IRS information, and my website domain registration. So when you’re examining what you need to update, be sure to check 12 months back!

It’s also handy to keep a minimum in your old bank account for at least a month in case you miss anything—more on that later.

Giving Myself A Mini Money Makeover

All this direct contact with my finances put me in quite the emotional state that bordered on panic. I saw so many expenses, and not nearly enough savings.

So while I was transferring our automatic payments, I took the opportunity to cancel subscriptions I no longer used, updated my car insurance to be a little more affordable, and reviewed my savings account. (Here are more tips to make your money work for you!)

It was when I was reviewing my savings that I realized my interest rate had been abysmal for years. I immediately moved my emergency fund and long-term savings into other financial institutions that offered more than .01% interest rates. And, since it made sense at the time, I increased our monthly automatic savings withdrawals, too.

I also reviewed the terms for my other accounts, since I had clearly not done so well the first time around. I familiarized myself with exactly where my money was, which local branches were available to me, and ensured my contact information was up-to-date. I even gave myself a thorough password update across platforms.

Saying Goodbye To The Old Bank

As I noted earlier, having money in both accounts for a short period of time will save you lots of headache. I began transferring my direct deposits from one bank to the other, but things got complicated when unexpected payments came through on the zero-balance account.

“To put it simply, I was tossing my money back and forth like a ping-pong ball, incurring fees as I went.”

While we attempted to update this, we endured more than one overdrawn account, numerous transfer fees, and rejected payments. I used Zelle to transfer from one to the other, but when I needed to do the reverse, I discovered I couldn’t have two bank accounts attached. To put it simply, I was tossing my money back and forth like a ping-pong ball, incurring fees as I went.

So for good measure, you might want to keep both accounts active for at least a month in case any unexpected or missed expenses come up. (Be sure that you’re meeting your minimum deposit requirements so you don’t rack up any additional fees).

Once you’re ready to close out, you’ll likely need to call in directly so that you can get a correct withdrawal amount and avoid zero balance fees. I was able to do this easily enough. The bank did, however, request a handwritten letter confirming I was canceling the account.

A couple weeks later, I received a hand-addressed envelope in return with nothing but an eerie “your account is closed” receipt. Turns out, this is important! Getting verification that your account has been closed will help insure you against future payments accidentally re-opening your account without your knowledge (this is called a zombie account 🧟).

Reviewing Loose Ends & Planning Ahead

Once the dust settled, I realized how mindless I had become with my money. In a way, the shakeup was beneficial—I started to read more about investing, saving, and consolidating certain debts. I created an actual emergency fund that I feed regularly and lives out of sight, out of mind so it can be there when I need it the most. I’m now enlisting the help of a financial advisor so that I can feel even more certain about my direction in the future (especially if and when I decide to change banks again.)

I also learned, a financial fact I wish I’d known in my twenties, that changing your bank won’t affect your credit score unless you close or open a credit card, or take out a consolidation loan in the process. (Or, if you’re like me, run the risk of missing important recurring bills during the transition.)

I kept close tabs on my credit score after switching banks, so I could verify that everything was in the right place. If you’re in the US, you are entitled to one free credit score annually from three different providers—so you can get up to three scores total. Keep tabs on this throughout the year to make sure only authorized accounts are live.

“Where we keep our money is important—for so many reasons.”

I’ll be honest: This isn’t a process I’m eager to undergo again. Is it really that hard to change banks, you ask? I think it depends on how organized you are, and how much time you have to make thoughtful decisions about where your money is going.

Not everyone is going to have the luxury of walking to the local credit union and selecting a neat little lollipop from the tellers like I did with my mom when I was a kid. And, not everyone will have access to comprehensive online services, advising, or investing. But where we keep our money is important—for so many reasons. And changing our minds can be worthwhile, with the right support.

Have you changed banks? Share your experience in the comments below.

Emily Torres is the Editorial Director at The Good Trade. Born and raised in Indiana, she studied Creative Writing and Business at Indiana University. You can usually find her in her colorful Los Angeles apartment journaling, caring for her rabbits, or gaming.